Both public and private companies registered in India, as per the Income tax Act 1961, need to pay corporate tax. Corporate Tax is the direct tax levied on the net income or profit of the business entity registered in India.
The corporate tax in India is computed on the net revenue/profit of a company after considering necessary additions and deletions as per Income Tax act, 1961.
Moreover, the corporate tax is levied on the amount left with the company after meeting necessary expenses. There are actually a host of expenses a company goes through when selling their goods or services. Following are the illustrative list of expenses that we can consider primarily,
- Expenses drawn for administrative purposes
- Total cost of goods or services sold
- Selling expenditures